00:07:59 · Brian Neider, CJ Gustafson
They might even present some of the data without footnotes, and it's really hard to know what's true today versus what's laden with assumptions for the future. And that becomes a difficult conversation because you're trying to piece together what does this look like right now in the here and now versus what does this look like, you know, in the future. And that's a completely different ballgame. [00:08:21] S1: Right, wrong, or indifferent. AI helps us. AI hurts us. We're insulated from AI. How important do you think it is just to have an opinion? [00:08:29] S0: Well, it's super important to have an opinion because I think that it's just the way in which the world is moving. And I think that, you know, the idea of burying your head in the sand just is never gonna be a good thing. So I think a lot of times we have a situation where we'll see a company that says, basically, we're doing the same as we've always done and things will be fine. And it's okay to have a point of view to say this isn't gonna change in the way in which everybody thinks it's gonna change, but you should have some stand... Substantiation behind that. [00:08:54] S1: Got it. And and on the second group whose unit economics may not be where they want it yet, are they showing something to you that has weird adjustments to it for what they think the future run rate state is going to be, or what's going on there?
00:08:54 · CJ Gustafson, Brian Neider
[00:08:54] S1: Got it. And and on the second group whose unit economics may not be where they want it yet, are they showing something to you that has weird adjustments to it for what they think the future run rate state is going to be, or what's going on there? [00:09:07] S0: It's usually something of what... Like what you're talking about. So it might be something where it says, look, here's our actual financial statements, but maybe it doesn't even present the actual p and l. And then there's some type of pro form a p and l where the revenues actually match perfectly fine, but there's some type of assumptions laden in the... Usually it's in the cost of goods sold where they're making an assumption. They might not exactly be foot... Footnoting it. You get the metrics. They say our gross margin is x. And then when you get the actual financials, it doesn't match at all. And then you start asking the questions, and that's where it gets a little bit difficult and and awkward. [00:09:45] S1: So so they have the real revenue, but then they're saying, oh, but by the way, we think Moore's law is gonna kick in here, and our gross margin actually is gonna be 40. It's gonna be 65. [00:09:53] S0: Something along those lines. And, you know, it's like, well, okay, over what time period is this gonna happen? And why did he not denote that this was kind of like the future state? Why is this showing as 2026 revenues?
00:09:53 · Brian Neider, CJ Gustafson
[00:09:53] S0: Something along those lines. And, you know, it's like, well, okay, over what time period is this gonna happen? And why did he not denote that this was kind of like the future state? Why is this showing as 2026 revenues? [00:10:04] S1: Well, I think it begs the question, is is there a difference between selling your company well and being intellectually dishonest? Where where exactly is the line there?
00:10:13 · Brian Neider
[00:10:13] S0: It's a hard one. I mean, you wanna sell your vision. You wanna be bullish, but holding back material data is something that we... Like, for us, we we have a hard time about. It's a lot in kind of how the market is receiving you. So if there's investors that are super bullish in your space and you could get deals closed, like, without sharing too much data, that's just the market speaking, and don't hate the player, hate the game. There's a lot of situations where companies might say, look. Like, this is the data pack that we're sharing. There's a tremendous amount of demand for what we're doing, and you could take it or leave it. That's a a difficult game to play, but a lot of investment firms are willing to play it. And that's one aspect. I don't look at that as being intellectually dishonest. I just sort of look at that as the companies are sharing what is necessary to actually get the deal done, and there's actually just so much demand that they don't need to be doing anything other than what they're doing. There's other situations that I think are a little bit more acute where maybe there's not that demand for the company. Maybe it's not one of these situations where, you know, a company says, okay, we're raising and they give a small data pack to 10 different investors and have a billion dollars of demand by the weekend. Maybe it's like more of an ordinary course type situation where companies willing to share data, investment firm gives them a diligence request list, says, hey. Look. These are the 10 things that we need or 20 things that we need. Could you share? A lot of times what we see is that there's management teams that are consciously not sharing certain aspects of that data. So they'll say, look, we gave... You asked for 10 things, we gave you eight of them. None of them were the single most important thing. And usually the one or two things that they didn't give you oftentimes can be the single most important thing. And there's usually something hiding behind that. And when that happens, you start... You know, you need to question it. And I look at that more as oftentimes more dishonesty rather than, you know, the market's super hot and we're just gonna be getting something done. We only need to share what we're we're gonna share.
00:12:13 · Brian Neider
Sort of like selectively sharing in a situation where there should be a little bit more trust, and that's where we have a difficult time.
00:12:20 · CJ Gustafson
[00:12:20] S1: A wise man once told me that every startup is really just a loosely functioning disaster. Ain't that the truth? If your startup needs a little extra support, and let's be honest, who doesn't need a little help now and then? You're in for a pleasant surprise with Fidelity. Fidelity Private Shares helps early and growth stage companies stay investor ready with cap table, data room, and scenario modeling all in one place. A messy or missing cap table might not just slow you down, it could cost you your next fundraising round. VCs are flooded with pitches, if your equity is confusing or missing, they'll move on fast. Fidelity Private Shares gives founders the structure and simplicity to focus on what actually matters, building your company. If you stay investor ready, you don't have to get investor ready. Check out fidelityprivateshares.com to learn more. That's fidelityprivateshares.com. I got news for you. The ERP category is finally getting disrupted. And if you haven't heard of Rillet yet, please pay attention. It's the AI native ERP built specifically to replace NetSuite, and it's already won over hundreds of finance teams. Their mission is to make these zero day close a reality, and they're actually doing it. We're talking teams closing the books at 01:35PM on the first day of the month. Companies like Windsurf, Mercor, and hundreds of others run their entire finance stack on Rillet. Revenue recognition, closed management, multi entity, native Stripe, and Salesforce integrations, whoo, everything a scaling company needs. They've got 5.0 start. Five zero. Wow. Five zero stars on g two. They're backed by a 16 z and Sequoia, heard of them, and CPA led implementations that get you live in forty five days. That is simply unheard of in the ERP space. If your books aren't running as fast as your business, check out Rillet. Book a demo at rillet.com/cj. That is rillet.com/cj. That's me. You are what your gross margin says you are. Sorry. My kids are tired of hearing me yell that at the kitchen table. Dad, I'm two. I don't know what cloud costs are. Well, I do. And cloud infrastructure is the second largest line on most tech p and l's. And yet, most finance leaders couldn't tell you how it's priced.